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Apple’s (s aapl) operating profit growth could take a 30 percent hit by 2015, owing to the rise of HTML5, according to Bernstein Research analyst Toni Sacconaghi Jr. Forrester Research agrees that HTML5 adoption could also affect Apple’s ability to generate revenue from native apps, according to a PCWorld article on Monday. But industry watchers should be wary of underestimating the continued appeal of the native iOS app for two big reasons.
1. The limits of native apps can quickly change
Part of the argument behind the ability of HTML5 to replace native apps on devices like the iPad and iPhone is that the web tech is catching up in terms of features to iOS software. That may be true, but it will likely never actually reach par with native apps, because Apple is in the driver’s seat when it comes to what third-party software can and can’t do on its devices. Every new major iOS update brings new APIs for developers to play with, and each new hardware generation puts new connectivity options, radios and other hardware features at their disposal. For example, iOS 5 introduces 1,500 new APIs for developers to leverage, including access to iCloud Storage, Newsstand and Twitter.
Only Apple determines what its software can and can’t do and what kind of hardware it gets to work with; with HTML5, standards are set based on what all browsers will support, which requires more compromise. Also, HTML5 will necessarily have far more limited access to the full capabilities of iOS hardware, even though Apple has made some improvements on that side of things, like allowing mobile Safari to tap into larger portions of local device memory and geolocation services. But even if it looks like HTML5 is “catching up” to what’s possible with native apps, it will likely never actually match them, as Apple’s mobile tech evolves and it provides more APIs to native developers through the iOS SDK.
2. Apps have only just begun beating the mobile web
Mobile apps have only just recently started to be more popular than mobile websites for Internet access from smartphones and tablet devices. It’s a trend that has been in motion since the advent of app stores, and there’s little indication that it’s slowing or turning around, despite recent efforts by players like Vudu,(s wmt) Amazon (s amzn) and the Financial Times to create HTML5 web apps instead of going through Apple’s App Store.
It’s obvious that companies would prefer HTML5 over native apps, since web-based products would allow them to cut out Apple as a middleman and take in a larger percent of any profits, as well as make it easier for them to develop once for many platforms. But if studies around consumer mobile desires are any indication, the will on the user end of the spectrum just isn’t there to support an HTML5 mass migration. That may change as more HTML5 products come to market, but the advantages of native apps are still things consumers want: dependable offline access, device-specific interfaces and unfettered access to special hardware and software features.
I think Apple is poised to make more, not less, money from apps in the next few years, and I don’t think HTML5 is really in any position to cut into those profits yet.